Give out the major sources of terror funding in India and the efforts being made to curtail these sources. In the light of this, also discuss the aim and objective of the ‘No Money for Terror (NMFT)’ Conference recently held at New Delhi in November 2022.
Approach · directive: “give out / discuss”
What it asks · Identify the main sources of terror funding, the measures taken to cut them, and explain the aim and objectives of the November 2022 'No Money for Terror' conference in New Delhi.
The question has 3 parts — answer each
- Identify the main sources of terror funding in India
- Set out the measures taken to curtail those sources
- Discuss the aim and objectives of the November 2022 'No Money for Terror' Conference in New Delhi
Open with · Terror groups depend on money as much as on weapons, so choking their funds is central to counter-terrorism.
Cover
- Sources: state sponsorship and cross-border support, hawala and informal channels, fake currency, drug trafficking and smuggling, extortion, and misuse of charities and non-profits.
- New channels: crowdfunding, virtual assets and online payment platforms, and shell companies.
- Legal steps: UAPA (amended in 2004 and 2019) makes terror financing an offence; PMLA 2002 (virtual asset providers brought in 2023); action by FIU-IND, the NIA's terror-funding and fake-currency cell, ED and NCB.
- Policy steps: KYC and reporting norms, monitoring of hawala, demonetisation (2016) against fake currency, and India's FATF membership since 2010.
- NMFT conference (18-19 November 2022): the third ministerial conference after Paris (2018) and Melbourne (2019), aimed at reviewing the global counter-terror-financing regime and agreeing coordinated steps.
- Objectives: examine global trends in terror financing, formal and informal fund channels, emerging technologies, and international cooperation; India offered to host a permanent NMFT secretariat.
- Way forward: tighter action against state sponsors, FATF-style peer pressure, regulation of virtual assets, and intelligence and legal cooperation.
Close with · Sustained international cooperation and strict domestic enforcement are needed to deny terrorists the money that sustains them.
Add value (verified)
- PIB records that the November 2022 conference built on the Paris (2018) and Melbourne (2019) meetings and aimed to strengthen global cooperation in denying finance to terrorists. PIB (Prime Minister's Office): PM attends third 'No Money for Terror' Ministerial Conference on Counter-Terrorism Financing in New Delhi ↗“The conference will build on gains and learnings of the previous two conferences (held in Paris in April 2018 and in Melbourne in November 2019) and will work towards enhancing global cooperation to deny finances to terrorists”
Question: UPSC's CS (Main) 2023, GS Paper III — paper ↗. Approach: Minimalist IAS, checked 30 Sept 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer · 275 words (UPSC limit 250) · Minimalist IAS
Terror groups need money as much as weapons, for recruits, arms, safe houses and propaganda, so choking their funds is central to counter-terrorism.
Major sources of terror funding
- State sponsorship and cross-border support routed through handlers.
- Hawala and other informal value-transfer channels.
- Fake Indian currency notes pushed across the border.
- Drug trafficking and smuggling, especially narco-terror through Punjab and Jammu and Kashmir.
- Extortion by insurgent and Maoist groups.
- Misuse of charities and non-profits, and newer channels: crowdfunding, virtual assets, online payment platforms and shell companies.
Efforts to curtail them
- Law: UAPA, amended in 2004 and 2019, makes terror financing an offence; PMLA 2002 targets laundering, with virtual-asset service providers brought under it in 2023.
- Agencies: FIU-IND tracks suspicious transactions; the NIA's terror-funding and fake-currency cell investigates; ED and NCB act on laundering and narcotics.
- Policy: KYC and reporting norms for banks and payment firms, monitoring of hawala, demonetisation in 2016 against fake currency, and FATF membership since 2010 for peer review.
The No Money for Terror Conference, November 2022
- Aim: the third ministerial conference (18-19 November 2022), after Paris (2018) and Melbourne (2019), reviewed the global regime against terror financing and sought coordinated action among states.
- Objectives: examine global trends in terror financing; map formal and informal fund channels; address emerging technologies such as virtual assets; and deepen international cooperation.
- India offered to host a permanent NMFT secretariat to keep the effort continuous.
Way forward
- Sustained pressure on state sponsors, FATF-style peer review, regulation of virtual assets, and faster intelligence and legal cooperation across borders.
Denying terrorists their money needs strict domestic enforcement and sustained international cooperation, the very agenda the New Delhi conference set.
Written by Minimalist IAS from facts checked at source (how we verify). UPSC publishes no model answers: compare your structure and coverage with this, then write your own.